Leading trade credit insurer Euler Hermes ACI on January 14 issued its 2008 Global Risk Analysis Report for emerging economies. The report is calling for lower global gross domestic product growth and reduced world trade volumes for the year.
World: Expect world GDP growth of around 3 percent in 2008 (3.8 percent in 2007) the lowest since 2003, with the United States at just 1.5 percent (2.2 percent 2007), Japan 1.5 percent (1.9 percent 2007) and Euro-zone 2 percent (2.6 percent 2007). Moreover, the risks are largely to the downside. Expect further monetary easing, but inflationary pressure to limit its scope and the upside when recovery begins. Nonetheless, expect inflation to ease, helped by lower commodity prices, though energy supply shocks remain a threat. Emerging economies generally are better placed to weather the downturn than previously, and will provide some cushion, but have by no means de-coupled. Expect economic policies and stable government to be under closer scrutiny. World trade growth will be 5 to 6 percent (average 8.1 percent 2004-07). Expect the slowdown to increase trade tensions and the influence of sovereign wealth funds. Politically, the Iran nuclear issue remains live and the Middle East generally the most potent flashpoint.
